Product Life Cycles and New Product Development L6 Flashcards
What does the term ‘product’ mean?
The tangible and intangible attributes related to physical goods and services, ideas, people, places, experiences and even a mix of these various elements
What are examples of completely intangible products?
- Education
- Entertainment
- Hairdressing
What are examples of fairly intangible products?
- Financial services
- Healthcare
- Theme parks
What are examples of fairly tangible products?
- Computer hardware
- 3D televisions
- Fast food retailers
What are examples of completely tangible products?
- Toiletries
- Frozen foods
- Fruit
What are the three product levels?
Core product
Embodied product
Augmented product
What is a core product?
The real core benefit/service. May be a functional benefit (what the product will do) or an emotional benefit (how the product or service will make people feel)
What is an embodied product?
Consists of the physical good or service plus an expected benefit. E.g features, capabilities, durability, design, packaging, promotion and brand name
What is the augmented product?
Consists of the embodied product plus all those factors that are necessary to support the purchase and any post purchase activities e.g credit, finance, training, delivery
What is the paradox regarding product development decisions?
Innovation is costly and a risky activity but risky to not innovate
What is the difference between innovation and invention?
Innovation is about change and remodelling things. Invention is about creating something totally new that hasn’t existed before.
What is product differentiation?
Act of designing a set of meaningful differences to distinguish the company’s products from competitor’s products.
How can firm’s differentiate?
Product/service attributes: quality, features, style and design
Packaging/delivery
Branding
Euthanasia
What does the product lifecycle consist of?
- Product development
- Introduction
- Growth
- Maturity
- Decline
How does the Boston Matrix relate to the product lifecycle?
Dog is product development as it doesn’t have MS, not sure if there is potential
Question mark is introduction as potential looking good
Star is growth as there is lots of profit to sustain
Cash cow is maturity as share is declining but profit is still being reaped
Dog is a failing product - decline
What is the lifecycle like for a style?
It increases quickly then dips and increases slightly a bit later before falling again
What is the lifecycle like for a fashion?
It increases gradually and falls gradually
What is the lifecycle like for a fad?
It increases sharply and decreases sharply
What are the key characteristics of a service?
- Intangibility
- Perishability - only valid then
- Variability
- Inseparability as cannot separate provider and receiver
- Lack of ownership as no transfer of ownership
What are the stages of service innovation development?
1) Services used as after-sales product support
2) Aftersales services used to complement and upsell core product
3) Services and products used together to differentiate an offering and solve lifecycle problems
4) Services become a fully integrated element in overall offering
What is servitisation?
The provision of an integrated bundle of product/service solutions for the entire lifecycle of their customers ‘from cradle to grave’
What are the 3 possible ways to manage a product mix?
- Modify existing product
- Delete existing product
- Develop new product
What does a deletion analysis consist of?
Monitoring performance on a continuous basis, recognising product decline, option to retain if can change something, if deletion can phase out or allow it to runout or withdraw damaging brand
What product modification options exist?
- Product: improve, embellish
- Price: increase/decrease
- Promotion: increase/decrease, change mix
- Presentation: change design
- People: train, replace
- PH Env: enhance, change, leverage
- Positioning: change sector or target
- Place: increase, switch to different outlets
